Key Takeaways
- Fed Chair Powell expected to announce 25bps rate cut today
- FOMC meeting outcome at 2 pm ET, press conference at 2:30 pm ET
- Watch live on US Federal Reserve YouTube channel
- September 2025 saw first rate cut amid labor market concerns
Federal Reserve Chair Jerome Powell is poised to announce an interest rate cut today as the US government shutdown creates economic uncertainty. The Federal Open Market Committee’s two-day meeting concludes on October 29, with Powell scheduled to reveal the decision at 2 pm Eastern Time, followed by a crucial press conference at 2:30 pm ET.
The Fed is expected to implement a 25 basis point reduction, bringing the policy rate to 3.75%-4.00%. This follows September’s rate cut – the first of 2025 – which reflected growing concerns about labor market slowdown.
All financial markets are watching Powell’s press conference for signals about December’s potential rate cut. Analysts warn that any deviation from market expectations could trigger significant reactions across equities and bonds.
“Despite the expectation of a cut, the Fed is signalling caution: it consistently emphasizes ‘meeting-by-meeting’ data dependence, and some officials remain wary about cutting too fast given inflation risks.Market expectations are very high for the cut and for multiple cuts this year; if the Fed disappoints, by cutting less or signalling fewer cuts, markets could react negatively in equities, bonds, risk assets,” says Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Data Challenges Amid Government Shutdown
The Fed faces unusual obstacles in its decision-making process due to the US government shutdown. Critical economic reports remain unpublished, leaving policymakers without comprehensive data.
The unemployment rate stood at 4.3% in August, with Fed officials expressing concern about rising joblessness. September’s CPI data, delayed until October 24, showed inflation at 3% annually – below forecasts of 3.1% but the highest since January.
Core CPI also increased 3.0% over the past year. The US economy currently faces the dual challenge of persistent inflation and a weakening job market, creating division within the Fed about the appropriate monetary policy path forward.
